4 Advantages of Long Term Bike Insurance

You’re probably aware of the various subscription plans offered by OTT platforms like Netflix, Amazon Prime, Hotstar, Zee5, etc. Some of these platforms provide semi-annual and annual subscription plans, which are valid for 6 and 12 months, respectively. Some platforms provide quarterly or monthly subscription options too - which you can choose if you don’t want to buy the subscription for 6 or 12 months at once.

Now, similar to this, you can also choose for how long you want your two-wheeler insurance to offer you coverage. You can choose between a short-term two-wheeler insurance policy that typically provides coverage for one year and a long-term policy that may extend for multiple years such as two, three, or even five years depending on the policy type and insurer. For new two-wheelers in India, a five-year third-party insurance cover is mandatory at the time of purchase as per regulatory guidelines.

In this article, we discuss long term two-wheeler insurance plans - their meaning, benefits, and how you can go about buying one.

So, let’s begin!
 

What is a Long Term Policy?

A long term policy, as the name implies, protects the insured vehicle for a longer tenure. In the case of bike insurance, long-term policies provide coverage for more than one year. Depending on the policy type and insurer, the tenure may range from 2 years to 5 years.
 

Benefits of Buying a Long Term Bike Insurance Policy

Here are a few benefits of buying a long term bike insurance policy -

• Reduces The Risk Of Policy-lapse
  If you don’t pay the premiums of your insurance policy on time, it will lapse. Meaning, it will expire or become inactive. Then, when you purchase a new policy you’ll have to get your bike inspected again. You may also have to go through the entire paperwork again. All of this can be easily avoided if you purchase a long term bike insurance policy - as you’ll be covered continuously for a period of 2 or 3 years.

• IDV Remains Unchanged
  IDV (Insured Declared Value) represents the maximum amount payable by the insurer if the insured vehicle is stolen or declared a total loss. It generally reflects the vehicle’s current market value. Normally, the IDV decreases every year at the time of renewal. IDV is determined based on the manufacturer’s listed selling price and depreciation schedule at the beginning of the insurance period. In long-term policies, insurers may specify the IDV for each year of the policy based on depreciation rules.

• Avail Extra Discounts
  Many insurance companies provide discounts if you buy a policy with a longer duration, reducing your premium. So, a 1-year-old Bajaj Pulsar 125 CC should ideally have an IDV of about Rs 62,000. If you plan on buying a one-year insurance plan, it will cost you somewhere around Rs 1800. On the other hand, if you buy a two-year plan it will cost you around Rs 3200 - instead of Rs 3600.

• Helps Save On Premiums
  Generally, insurance companies increase your policy premiums every year. So, if you buy a short term bike policy, you’ll have to pay increased premiums every year.

  For a long term policy, you’ll be paying the premium amount as a lump sum for a period of 2 years or 3 years - depending on the tenure you choose. So, this helps you save on premiums until your policy expires.

  Example - Raj buys a policy with an IDV of RS 1 Lakhs. for a tenure of 2 years. He buys the policy for a premium of Rs. 16,000.

  Now, Raj's friend, Riya owns a bike of the same make, model, and age. She buys a bike insurance policy with an IDV of Rs 1 Lakhs too. She, however, buys it for a term of 1 year and pays a premium of Rs. 8000. Next year, on renewal, the insurer asks her to pay Rs. 10,000 for the same policy.

  So, Riya has paid a total premium of Rs. 18,000. So, you can see how buying a policy for a longer tenure helped Raj save Rs. 2000.
  

How to Buy/Renew a Long Term Bike Policy?

Here’s a step-by-step process you’ll have to follow to purchase or renew a long term bike policy -

• Visiting The Insurer’s Website
  The first thing you’ll have to do is visit the website of the insurance company you want to buy the policy from.

• Visiting The Two-Wheeler Section
  Next, there will be a two-wheeler section on the website. If you click on that, you’ll come across two options -
  • Buy A New Bike Insurance Policy.
  • Renew your existing insurance policy.
  • If you want to buy a new policy, you can choose the first option. And, if you want to renew your policy, you can select the second option.
• Entering The Details
  ​​​​​​​Next, you’ll be asked to enter the details of your vehicle, like -
  • Vehicle’s registration number
  • Make and model
  • Registration/manufacturing year, etc.

• Checking The Quotes & Coverage-Related Details
  After you enter all the details, you’ll be directed to the quote page where all the details of the vehicle, as well as the coverage details, will be mentioned. You can choose a quote that you think will be appropriate for you.

• Selecting The Policy Term
  ​​​​​​​Next, you can choose for how long you wish to buy/renew the insurance policy. In general, every insurance company provides three options
  • 1 Years
  • 2 Years
  • 3 Years
  • 5 years (commonly applicable for long-term third-party coverage for new two-wheelers).

You can select a policy term that suits your needs the best. Post this, you’ll be directed to the premium page.

• Checking The Details
  Now, before you proceed with the payment, ensure you double-check all the details of your vehicle, check the IDV, etc. You can also select add-ons at this stage. So, check which add-ons are available with the insurer, and select the ones you want to purchase.

  In case you’re renewing your existing insurance policy, make sure you also check the No Claim Bonus Discount mentioned.

• Making The Payment
  After you check all the details and select the add-ons, you can make the payment. And after the payment is completed, the insurance company will send you your policy.

This brings us to the end of this article. Hope this article helped you gain enough clarity on what long term bike insurance plans are, their benefits, and the steps involved in buying or renewing them.